How should I fill out the dual agency section in the new Exclusive Buyer Agency Agreement (Form 201)?
QUESTION: In the previous version of Form 201, I used to initial all the lines in the dual agency section. However, my BIC told me today that I cannot do that in the new version of Form 201 that was released last month. Did something change? Can you tell me how to fill this section out?
ANSWER: The dual agency section in Form 201 is not a menu of choices like the Working with Real Estate Agents Brochure. This was true in the old Form 201, and it is still true in the newly revised Form 201. In the WWREA, you should initial all the different types of agency that you are willing to offer a particular consumer. That means sometimes you might initial all the lines, and other times that means you will initial only one or two lines.
Form 201 does not operate the same way, and agents have often filled out the form incorrectly as a result. As with the old Form 201, the new dual agency section in Form 201 is meant to give you clear direction on what your agency can and cannot be with your client. The agency agreed to can change by amending Form 201, but as for how the dual agency section is to be completed, it is meant be specific and not leave any gray area as to how dual agency is practiced by the firm.
The dual agency section in new Form 201 looks like this:
Authorizations: Initial only as applicable below.
_______ _______ Firm may act as a dual agent in a transaction involving Buyer. If Firm may not act as a dual agent, then Buyer will always have exclusive representation under this Agreement.
If Firm may act as a dual agent, then:
_______ _______ Buyer authorizes the same agent to represent both Buyer and a seller in dual agency.
_______ _______ Buyer directs Firm to practice designated dual agency. If Buyer directs Firm to practice designated dual agency, then Firm may only practice designated dual agency unless it is not allowed under North Carolina law.
The first initial line authorizes dual agency. If it is not initialed, then only exclusive agency should be practiced. Dual agency may be authorized later by amending Form 201, but unless or until that happens, exclusive agency is required.
If dual agency is permitted by initialing the first line, then the question is whether the same agent can represent both the buyer and the seller. If the second line is initialed, then the same agent can represent both the buyer and the seller. If the second line is not initialed, then the buyer and the seller must have separate agents when dual agency is practiced.
If the second line is not initialed, then the question is whether the buyer will allow designated dual agency. This type of dual agency requires the buyer and seller to be represented by two separate agents with a firewall between them. If the second line is initialed, then the third line should not be. It will create an ambiguity as to what the buyer is directing. If the third line is initialed, then designated dual agency must be practiced.
If the first line is initialed, but the second and third lines are not, then the firm may practice dual agency, but only if separate agents represent the buyer and the seller. It is not designated dual agency in that there must be a firewall between the agents, but the buyer may feel more comfortable not having the same agent represent both sides in the transaction.
Release Date: 11/27/2024
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